Suppose the demand function is Q _x^d = 100 - 8P_x + 6P_y B M.If P_x = $4, P_y = $2, and M = $10, what is the cross-price elasticity of good x with respect to the price of good y? A)0.17. B)0.38. C)0.21. D)0.04.

Question

Quizplus · Accepted Answer

The cross-price elasticity of demand is calculated as the percentage change in the quantity demanded of good x divided by the percentage change in the price of good y. In this case, the demand function is Q _x^d = 100 - 8P_x + 6P_y B M. If P_x = $4, P_y = $2, and M = $10, then the cross-price elasticity of demand is:```E_xy = (dQ _x^d / dP_y) * (P_y / Q _x^d) = (6 / 100) * (2 / 80) = 0.15```Therefore, the correct answer is A) 0.17.

Suppose the Demand Function Is Q xd = 100 -

Suppose the Demand Function Is Q _x^d = 100 -